Rooftop solar projects to get $1,500 million foreign aid

The World Bank, Asian Development Bank and the New Development Bank formed by the BRICS nations are providing loans to boost India's rooftop solar programme.Kaavya Chandy | ET Bureau | Updated: January 08, 2016, 17:42 IST

“We are getting $500 million (Rs 3,345 crore) from each of them to fund rooftop solar projects, mostly in the industrial and commercial sector," said Upendra Tripathy, secretary at the Ministry of New and Renewable Energy (MNRE).The loans are likely to be disbursed through leading public sector banks and financial institutions.

The funds will be used to provide 30% subsidy to all domestic users and public institutions which set up rooftop solar plants.

Industrial and commercial establishments, however, are not entitled to this subsidy.

"These loans will bring in cheaper capital even for those not covered by the subsidy," said Tripathy.

India has set itself an ambitious target of 1,00,000 MW of installed solar capacity by 2022, of which 40,000 MW is to come from rooftop solar plants.

Currently, rooftop solar contributes merely 525 MW to India's total 4,800 MW solar capacity. While the tar get for rooftop solar in 201516 was a modest 200 MW, for 2016-17 it is 4,800 MW, or equal to India's entire solar capacity at present.

The subsidy of Rs 5,000 crore is expected to support installation of 4,200 MW of rooftop solar over the next five years.

Solar rooftop installations by industrial and commercial establishments will be in addition to this.

"In the last two years, the capital subsidy scheme did more harm than good because sufficient funds were not available," said Jasmeet Khurana, associate director­consulting at Bridge to India, a solar consultancy. "Now, with some changes in the scheme and a substantial fund allocation, the problems will be resolved."

“To save the environment and to fight climate change, my government has planned a major campaign. By 2022, we want to generate 175 GW of renewable energy. In the last three years, we have already achieved 60 GW or around one-third of this target,” he said.